State officials said 10,800 non-farm jobs were created last month. The number of jobs gained since the economy began to rebound is now at more than 767,000.
The national unemployment rate for May was 7.6 percent.
California is tied with New Jersey for the sixth highest unemployment rate in the nation, according to the U.S. Labor Department. Nevada has the highest rate, followed by Illinois and Mississippi, Rhode Island and North Carolina.
Nearly 18,000 fewer Californians received unemployment insurance benefits in May compared to the previous month, state officials reported.
The number of Californians holding jobs continues to grow, but the recent gains may be deceiving, said Michael Bernick, a former Employment Development Department director who is now with the law firm Sedgwick LLP in San Francisco. The latest figures show 17 million Californians holding jobs in May, up 529,000 from the same period last year.
"The increase is not in payroll jobs; it's people who say they're employed as either independent contractors or self-employed," Bernick said. "Now, that may be very positive in the sense of new business formation, but it may be a lot of these people who are marginally holding on."
The state also saw the greatest monthly gains in the leisure and hospitality industry, which tends to have low-wage jobs, Bernick said.
Manufacturing, trade, financial activities, professional services, government, and education and health added 37,400 jobs. Mining, construction and information were down 26,600 jobs over the month.
The Associated Press contributed to this report.